RIO, AZN, IMB, SHEL: Stocks to watch as UK corporate insolvencies rise

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RIO, AZN, IMB, SHEL: Stocks to watch as UK corporate insolvencies rise

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 RIO, AZN, IMB, SHEL: Stocks to watch as UK corporate insolvencies rise
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Highlights

  • According to official figures from the UK’s insolvency service, the second quarter of this year saw 5,629 companies going bust in England and Wales.
  • This amounts to an 81% increase compared to the same period in 2021 and a 13% increase than the first quarter.

The rising cost of energy and fuel, supply and staff shortages has resulted in several companies filing for insolvency in the UK to its highest since 2009. According to official figures from the UK’s insolvency service, the second quarter of this year saw 5,629 companies going bust in England and Wales. 

This amounts to an 81% increase compared to the same period in 2021 and a 13% increase than the first quarter. It’s the most significant number of companies going bust for almost 13 years.

The new data revealed that these increased insolvencies were a result of 4,908 creditors’ voluntary liquidations (CVLs). This was the highest quarterly figure since the record began in 1960. Further, the number of compulsory liquidations also touched 368, which was still lower than the levels witnessed before Covid-19. Additionally, 320 administrations and 32 voluntary company arrangements (CVAs) were also recorded between 1 April and 30 June. 

The new data also highlighted that almost one in 228 active companies tumbled into liquidation over the past year alone. Experts believe Britain may face further insolvencies in the year ahead as companies face severe cashflow crunch and a slowdown in consumer spending. 

Amid the increasing concern over the recession and companies becoming insolvent, Kalkine Media deep dives into the stocks that investors may consider during challenging economic conditions.

Rio Tinto Plc (LON: RIO

One of the leading global mining groups was enjoying a market cap of £59,976.59 million and on Wednesday was trading at GBX 4,789.50. The RIO shares were down by 0.23% at 08:10 AM (GMT+1) on 3 August. The FTSE 100 listed firm had recently completed the sale of Cortez Gold Royalty for US$525 million in cash. Its EPS stood at 13.03, with an annual dividend yield of 10.9%. The company, however, offered negative returns to its investors of -22.48% with a one-year return of -2.12%.

AstraZeneca Plc (LON: AZN)

The shares of a global biopharmaceutical business witnessed a fall on Wednesday and were down by 0.93%. The AZN stock was trading at GBX 10,680.00 at 08:10 AM (GMT+1) on 3 August. The AZN reported a 48% increase in the total revenue in the first half of the year, pushing its revenue to US$22,161 million. Its one-year returns were trailing as it was up by 29.17%. AZN enjoyed a market cap of £167,034.07 million with an annual dividend yield of 2.1%.

Imperial Brands Plc (LON: IMB

Imperial Brands Plc boasted of a market cap of £17,382.96 million on 3 August. The multinational tobacco firm on Wednesday was trading at GBX 1,812.50 at 8:10 AM (GMT+1) and was down by 0.90%. IMB was offering its investors favourable returns of 16.12% and 11.58% on a one-year and YTD basis. Its earnings per share stand in the positive zone of 3.00, and its annual dividend yield stands at 8.9%.  

Shell Plc (LON: SHEL

One of the leading multinational oil and gas companies enjoyed a market cap of £158,967.39 million, and its shares were trading at GBX 2,161.00. The SHEL shares were down by 0.23% at 08:05 AM (GMT+1) on 3 August. The FTSE 100 listed energy firm, which had recently announced a US$6 billion share buyback programme to reduce the issued share capital, offered positive returns of 33.12% during the year. 

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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